While India is progressing rapidly towards a green energy transition with its ambitious ethanol-blending programme, this enthusiasm recently hit a roadblock after Bhutan rejected an offer from Indian Oil Marketing Companies (OMCs) for E20 petrol supply.
According to media reports, the Himalayan country declined the offer, stating that its fuel storage infrastructure is insufficient to safely handle ethanol-blended fuel. This highlights how geography and infrastructure can influence energy policy to the same extent as environmental goals.
India has fast-tracked its ethanol blending programme to cut crude oil imports, lower emissions and support biofuel production. The E20 petrol variant reportedly comprises 20 percent ethanol and is now launched widely across the nation as part of its clean fuel transition.
Why did Bhutan reject India's E20 petrol offer?
According to a report by The Bhutanese, the issue is not resistance to cleaner fuels but the lack of adequate storage facilities. Ethanol is hygroscopic, which means it quickly absorbs moisture from the atmosphere. This property makes storage more complex than conventional petrol. If water enters storage tanks by any chance, ethanol-blended fuel can split into separate layers, lowering fuel quality and affecting engine performance.
Bhutan says this poses a significant challenge because many of its fuel storage facilities are in mountainous terrain where moisture intrusion and seepage are not easy to get rid of. Storage tanks in such regions are more prone to water contamination, raising the risk of fuel degradation before it reaches consumers.
Workshop data cited by the publication indicated that owners of incompatible vehicles may experience extra annual repair costs between Rs 5,000 and Rs 10,000 for replacement parts and specialised fuel additives.
What it means for India
For India, Bhutan's response is unlikely to impact the overall ethanol production, driven primarily by local demand. However, it provides an important insight for future regional energy cooperation.
Transition of infrastructure
While New Delhi has made significant investments in ethanol production and in modifying its fuel supply chain, the Himalayan Kingdom would need to upgrade fuel depots, storage tanks, and handling systems before it can safely adopt higher ethanol blends. Until then, traditional petrol remains the more practical option.